Business Report: Howard Dicus explains the pathway to risky trading by banks

It’s time for Howard’s Illustrated Economics. This morning, the pathway to risky trading by banks. A decade ago, the nation’s megabanks broke the economy making risky trades. A banker would recommend you go long while a guy on another floor using the bank’s own funds was going short. Betting against your own customers isn’t just risky, it’s deeply immoral. Federal regulations, collectively nicknamed the Volcker Rule, put the brakes on this.Megabanks have lobbied against it, pretending they dislike its complexity.It IS complex, but what they really dislike is that it exists.Team Trump is moving to let big banks roll the dice again. It requires sign-off by five agencies but got two sign-offs this week.The Comptroller of the Currency and the FDIC both approved the plan.Still needed: signoffs by the Securities & Exchange Commission, the Commodity Futures Trading Commission, and the Fed.

Business Report: Howard Dicus explains the pathway to risky trading by banks